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USD Firms, Oil Sinks on US Production

Published February 7, 2017
  • The US dollar strengthened against major pairs this morning after Philadelphia Federal Reserve President, Patrick Harker, said yesterday that the FOMC could raise interest rates in March
  • A report from Goldman Sachs last week echoed bullish sentiments for the US economy in 2017; economists at the firm still strongly believe the FOMC will raise rates 3 times this year
  • Oil prices continued to slide lower this morning; the commodity was hit by a stronger dollar while investors balanced evidence that US oil production is countering cuts of the OPEC deal
  • Commodity analysts have observed that US oil output is recovering faster than expected as rig counts increase at an accelerating pace and become more efficient due to technological advances
  • Furthermore, Reuters has confirmed that in 2016, Chinese demand for oil grew at its slowest pace in at least three years
  • The Canadian dollar has suffered against the US dollar as the greenback recovers from previous losses and weaker oil weighs on CAD performance; 1.3135 now serves as a support for the USD/CAD pair
  • Canadian Trade Balance came in at 0.9 billion versus 1.2 billion expected
  • Canadian Ivey Purchasing Managers’ Index will be released at 10:00 AM EST this morning; investors will look for a reading above 50 to indicate industry expansion

Chart (1) Expected Moves Against the USD in February 2017